Why know Web Design Basics?
What Technologies/Applications are used in Web Design/Production?
What are some Web Design Considerations?
What might happen at a Web Design Job Interview?

Why know Web Design:

Principal Designer
Developer
Support and Training
If you're the server person
Evaluation of tools, services, bids

What Technologies are Used*:

Document Structure: html, xhtml, xml
Presentation: css, xslt
File Uploads: ftp, sftp (too many programs to list)
Browser Scripting: JavaScript
Web Design Programs: Adobe CS3, Microsoft Visual Web Developer...
Image/Animation Creation/Manipulation: Photoshop, Photoshop Elements, Fireworks, Flash, Director, Paint Shop Pro, Irfanview, GIMP...
CMS Apps: Joomla, Drupal, Plone...
Database Integration: ColdFusion, PHP/MySQL, ASP, ASP.net, JSP...
Other: DHTML, AJAX (JavaScript/XML)...

*This list is almost impossible to create as there are so many potential apps/approaches

Considerations:

Platform: Windows, Linux, Mac
Resolution: 800x600, 1024x768, 1280x960 and up
Browser: IE, FF, Safari, Opera, Linux Browsers
Browser Versions: IE7.0, 6.0, 5.5; FF2.0, 1.5...
Connection Speed: T1, Cable, DSL, 56k, Mobile
Devices: Computer, PDA, Cell Phone, PSP...
Accessibility: Jaws (ScreenReaders), 508 support...

Job Interview: (Straight from a former student)

- How much, and to what extent, experience with design technologies like CSS, XHTML, XML and JavaScript?

- Examples of projects completed and personal experience (especially in coursework if there is no professional work to display BIG emphasis here on projects done in classes like HCI, web design, independent studies, etc.)

- Obviously the exams they're handing out are challenging: I can re-summarize a few more of the more difficult or obscure questions if you'd like.

- Definitely keep pushing the 508 compliance issue. I'd even go so far as to take a few minutes during some key lectures or labs and point out how what you're teaching is in compliance with government regulations. Employers eat that stuff right up. They can't believe college kids have any sense of understanding when it comes to designing for compliance and disabilities.

- What I've seen is an emphasis on wanting to really migrate to web 2.0 and beyond in infrastructure and application development in conjunction with web design, so any working understanding of AJAX (even what it stands for or how it differs from other types of scripting) or PHP and SQL is valuable. I'd emphasize taking at least database tech after web design and if the course is available probably data driven web sites as well.

- In my experience, it's been completely a shocker for an employer to hear that you understand the repercussions of the overuse and improper use of technology. You can even be specific and extend this understanding to the world of design where certain pieces of web design and interface structuring are useful and harmful. They are FLOORED when somebody exhibits the ability to critically analyze something. I think it lets them know they won't be teaching you how to think, which is a relief for a lot of people.

- ALWAYS, unless they specifically ask you "We use Dreamweaver a lot on the job, are you familiar with it?", ALWAYS say you use a text-based editor (if interviewing with a techie kind of guy, don't be afraid to whip out NotePad++, believe it or not that's a pretty popular design tool among professionals from what I've seen) when creating and developing for the web. It, beyond a doubt, shows you aren't a hack and really can get dirty with the code when need be.

I hope that helps. They always ask the typical "Why should I hire you? Why should I not hire you?" questions. Creativity is key.